Summary: www.electricitypolicy.org.uk
EPRGWORKINGPAPER
Abstract
Nuclear Power and Deregulated Electricity
Markets: Lessons from British Energy
EPRG Working Paper 0808
Simon Taylor
The privatisation in 1996 and subsequent financial crisis in 2002 of the
company British Energy plc shed some light on the difficulties of running
a nuclear generator in a deregulated electricity market. This paper
explains the causes of the company's financial difficulties and argues
that they do not amount to evidence that nuclear power cannot survive
in liberalised markets. The causes of the financial crisis were complex
and varied but nuclear power risks are not conceptually different from
those successfully handled by markets in other sectors. In particular
there is no reason in principle why new nuclear power stations should
not be viable in a deregulated power market, assuming they are
fundamentally cost competitive.
Keywords Keywords: Electricity markets, nuclear power, risk
management, corporate strategy, financial strategy,